The Peruvian Narco-State

From El Diario Internacional, November, 1994

Experts generally agree that more than 50% of the income
from Peruvian exports come from the drug trade. Peruvian
economists now talk about the "narco-economy." The coca
growing regions are estimated to be over 200,000 hectares.

Fujimori's advisor Vladimiro Montesinos is accused of being
the broker between the drug traffickers and the military.
Dozens of military officers, among them army generals that
keep Fujimori in power have been denounced for having ties
to the drug Mafia.

The drug trafficker Demetrio Chavez, who is known as the
"Vatican", heads up a drug empire in the Peruvian jungle.
He recently denounced that his multimillion dollar business
functioned with the protection of military garrisons
stationed in Alto Huallaga.

The "Vaticano" revealed that he used the army's helicopters
and landing strips to transport thousands of tons of drugs.

All of this has made Peru, along Haiti, Surinam, Morocco,
Nigeria, Pakistan, Burma and Equatorial Guinea, as one of
the leading countries of the world considered as "narco-
states."

This article comes from the Geopolitical Drug Observatory
(OGD), an institution based in Paris-France that
investigates drug trafficking and its links to governments.

THE GANG OF ALBERTO FUJIMORI AND VLADIMIRO MONTESINOS

Here we will analyze the relationship between the state and
drug trafficking. The civil-military regime of Fujimori is
driven by drug deals and drug dollars. The article is also
based on a valuable testimony that show the link between
armed forces and the narcotraffickers. We present a summary
of the statements of a former U.S. Drug Enforcement Agency
(DEA) agent and major Evaristo Castillo Aste. The latter
is an active army officer, who formerly had a high post in
the military. He was close aid to general Torres Aciego
when this was the minister of defense. From there, he went
to Alto Huallaga where at various times he was chief of
military operations, chief of political warfare, and chief
political-military officer of the Sauce zone. Major
Castillo in his position with the high ranking officer saw
first hand the tentacles of the drug traffickers that
reached into the armed forces and the Fujimori government.

Major Castillo Aste made explosive accusations before the
inspector general office of the army. As a result, he was
accused of a petty theft of having "stolen $200 from a
general" and was expelled from the army in February of 1994.
The substantiated accusations he made brought him
persecution and death threats. To save himself from the
government's hatchet men and death squads he had to go into
hiding. He never spent more than one night in the same
house. On the door of his house, they hung a butchered dog
with death threats. They tried to kidnap one of his sons,
and another was told to urge his father to shut-up. His
wife was subjected to constant harassment. None of this
stopped major Evaristo Castillo, who courageously denounced
the generals and Fujimori's ministers who were linked to
international drug trafficking. Major Castillo now lives
in exile in Spain. He merely escaped and saved his life.

FUJIMORI AND THE DRUG MAFIA

Fujimori has declared on many occasions that he will
"frontally attack drug trafficking." Nevertheless, he has
made the state the principal money launderer of drug money.

The Peruvian economy survives thanks to the $1.5 to $2.0
billion dollars that are earned annually from the drug
trade. The Central Reserve Bank of Peru (BCR) is the
principle financial organization of the Peruvian drug
business. The government has turned the principal avenues
of Lima into drug dollar selling agencies. The chief
advisor of Fujimori is the ex-captain and lawyer Vladimiro
Montesinos, an individual who for many years was dedicated
to the legal defense of drug dealers. He was the lawyer for
Evaristo Porras, second to the powerful drug lord nicknamed
the "Minister." Montesinos was denounced by the media of
being the connection between the drug Mafia and the military
commanders. In the parliamentary list presented by Fujimori
in 1990, two people linked to drug trafficking were posted:
Carmela Polo Loayza, nicknamed "Madame Carmeli", who was
sentenced to 10 years in prison for the crime of drug
trafficking, and the lawyer Alcides Salomon Zorrilla,
defender of the known drug trafficker Carlos Lamberg
(semanario Caretas).

THE "VATICAN" SINGS: INFORMING ON HIS ASSOCIATES

At the beginning of January 1994, the Colombian police
captured the drug trafficker Demetrio Chavez Penaherrera
("Vatican") and turned him over to the Peruvian authorities.
This "gift" from the Colombians was a time-bomb for Fujimori
and his military gang. "Vatican" led one of the most
powerful drug Mafia in the Peruvian jungle. He moved 30
tons of basic cocaine paste (PBC) a month. At the time of
his capture he was reputed to be worth $500 million.
"Vatican" had built up his empire with the support of the
armed forces and the official authorities established in
Alto Huallaga. The big profits of Chavez Penaherrera were
shared with the high command of the army that in return gave
him the use of military patrols and army columns to protect
his drug business. "Vatican" rented the helicopters and
airfields of the government to move thousands of tons of
drugs. High officials, judges, mayors and other authorities
had been turned into employees of the Peruvian mafioso.

The capture of "Vatican" rocked the Peruvian regime to its
foundations. Any public declaration by the drug trafficker
could open-up a can of worms and create serious political
problems for the military leadership. The government and
the top military leaders tried various maneuvers to white-
wash the scandal. Fujimori and the official press were in
the lead of giving false leads and with the aim of creating
a smokescreen that many famous men and women were
implicated. In the midst of a spectacular circus Demetrio
Chavez was presented as a "terrorist", dressed in a striped
prison uniform and summarily judged in secret by hooded
military judges. In this way, "Vatican" the narcotrafficker
and mafioso was converted into a "dangerous terrorist", "a
collaborator with Sendero Luminoso." The official
propaganda signaled that "Vatican's" gang gave money and
armed to the Maoist guerrillas. He was accused of "treason
to the fatherland" and condemned to 30 years in prison
without any visitation rights, much less from journalists
that could get information from him.

On May 9, 1994, when the scandal had already blown-up in the
face of the government, "Vatican" met with an investigating
commission of the lame-duck Constitutional Congress where
he confirmed his close relationship with top military
commanders. The narcotrafficker indicated that between 1990
and 1993 he had distributed large sums among the leaders of
the Military-Political Command in Alto Huallaga and that in
return he received their protection and complete freedom of
action to carry out his business. He revealed that the
army's airfields and helicopters were used in the transport
of drugs. He said that every month there were 12 secret
flights and that he paid the military $5,000 for each use
of the airfields. He also admitted that he bought drugs
that were seized by the military from other drug
traffickers. He denied having collaborated in any way
whatsoever with the Maoist guerrillas. Furthermore, he
confirmed that with the support of the army he had organized
a paramilitary force of 200 gunmen that served to protect
his "interests", and who participated in joint
counterinsurgency operations with the military.

THE MILITARY PRICE

"The taxes are $70,000, $50,000 for you and your leaders and
$20,000 for the ground crew... he started a transfer of 800
kilos from one site to another." This is the testimony of
major Evaristo Castillo on the narcotrafficker's offer for
him to order the use of helicopters. In response to his
refusal, one of the mafia bosses replied threateningly: "I
fixed this with your leaders." Evaristo Castillo told of
this incident to general Eduardo Bellido, head of the
Political-Military Command of Alto Huallaga. The official
responded in a patronizing tone: "Well, it will be on your
conscience, only you will know if you accept it or not."
After this, he proposed to general Bellido to "carry out a
special operation to discover who ordered the helicopter
flights and how the drugs were transported. He was never
interested in the plan." (Caretas, No. 1295, January 1994,
pp. 30-31).

For his part, Augusto del Rio, ex-DEA agent who worked for
many years in Alto Huallaga, made powerful revelations on
the link between drug traffickers and the military on an
interview with channel 9 TV in Lima: "... I have seen with
my own eyes that the military leaders are compromised in the
protection of narcotraffickers, especially with `Vatican'...
It started with general Alberto Arciniega and continued with
general Bellido, I only need to show a photograph where they
could be seen, but their gunmen search everyone who goes to
the airfields and it was impossible to take pictures. If
they found cameras on you they would kill you..." According
to the ex-DEA agent, the high officials that were in charge
of guaranteeing the security of the narcotraffickers
received between $400,000 and $500,000 periodically.

The preceding article was published by The New Flag, a
newsletter reporting on contemporary Peruvian politics,
especially the developments of the People's War. Should
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